ASOS proves a festive winner with sales leap

Online fashion retailer ASOS posted a big jump in sales in the run-up to Christmas, placing it in the retail winners camp over the key festive trading season.
The designer looks of the likes of supermodel Kate Moss are copied by thousands of women and ASOS has proved a hit with its fast-changing fashions.The designer looks of the likes of supermodel Kate Moss are copied by thousands of women and ASOS has proved a hit with its fast-changing fashions.
The designer looks of the likes of supermodel Kate Moss are copied by thousands of women and ASOS has proved a hit with its fast-changing fashions.

ASOS, which targets internet-savvy 16 to 34-year-old women looking to emulate the designer looks of celebrities such as Kate Moss, Sienna Miller and Alexa Chung, but at a fraction of the price, said retail sales rose 38 per cent to £335.7m in the four months to December 31.

ASOS has been a big success story in retailing in recent years, with its fast-changing fashions attracting fans such as US First Lady Michelle Obama and singer Rita Ora.

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The group has plans to double the capacity of its £60m Barnsley warehouse this year, taking it from £1bn turnover to £2bn.

There are plans for two extensions and the site will become fully mechanised this year.

ASOS currently employs 3,000 people at the site of the former Grimethorpe Colliery and there are plans to expand by a further 1,500 in the next 12 to 18 months.

Nick Robertson, chief executive of ASOS, said: “We are very proud of what we are doing in South Yorkshire. The centre serves 237 countries and is our largest centre in the world.”

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ASOS said it had 7.9 million active customers as of December 31, up 41 per cent year-on-year.

Its UK sales jumped 37 per cent to £133.7m, with international sales up 38 per cent to £202m, with growth in sales in Europe particularly strong at 69 per cent.

ASOS said retail gross margin rose 90 basis points year-on-year in the period, reflecting tighter stock control.

“We have enjoyed another strong Christmas and made a good start to the financial year,” said Mr Robertson.

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“These results were driven by significant improvements to our customer proposition, including better delivery options, additional payment methods and the roll out of our premier service in key international markets.”

Analysts expect the firm to smash through its £1bn turnover target by the end of August.

ASOS’s performance was further proof that the Christmas season went very well for online retailers and those with a strong internet presence.

Figures from the British Retail Consortium (BRC) last week showed web sales grew at the fastest pace for more than three years in December, up 19.2 per cent, with sparkling performances from chains such as John Lewis and Next fuelled by online trade.

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ASOS, which stands for ‘As Seen on Screen’, said the first week in December was its strongest as shoppers stocked up on party dresses for the festive season. Oversized coats and Christmas jumpers were other best sellers.

The firm said it benefited from recent efforts to improve its service, having introduced free delivery and returns and an extended 9pm cut-off for next day delivery in the UK.

Freddie George, retail analyst at Cantor Fitzgerald, said: “We believe the company will focus on a limited number of markets with a view to making them as significant as the UK rather than taking a scatter gun approach to global expansion.”

ASOS recently launched in China, marking its eighth local language site outside the UK.

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Analyst Clive Black at Shore Capital said: “ASOS is an important company to our minds as it is a window on the future of retailing. We see its capabilities in order capture and fulfilment as world leading; it is a great British company.

“The virtues of ASOS have been recognised by the market with investors hungry for exposure to the future, which is arguably online and discount – hence ASOS benefits from being a scarce resource.”

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